Calculate the irr and use it to determine the maximum

Reference no: EM133575703

You are considering opening a new plant. The plant will cost $93.6 million upfront. After that it is expected to produce pro?ts of $29.9 million at the end of every year. The cash ?ows are expected to last forever. Calculate the NF"! oflhis investment opportunity if your cost of capital is 8.1%. Should you make the investment? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.

Reference no: EM133575703

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